SBI Mutual Fund announces changes to schemes

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SBI Mutual Fund has made a number of changes to its equity funds to bring them into conformity with the SEBI norms of October 2017. We have written about those rules here. In addition to the changes mentioned below, SBI schemes will also be allowed to invest 0-10% of their assets in units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InVITs).

Diversified Equity Funds

SBI Bluechip Equity Fund: This fund could previously invest 70-100% of its assets in equity and 0-30% in debt. It must now invest 80-100% of its assets in the stocks of large-cap companies, which are defined as the top 100 companies by market capitalization.

SBI Magnum Equity Fund (To be called SBI Magnum ESG Fund): This fund could previously invest 70-100% of its assets in equities with the balance (if any) in debt. It must now invest 80-100% of its assets in companies following the Environmental, Social and Governance Criteria. The fund had already adopted these filters for its investment. The new rules write this into its mandate. The fund’s benchmark has been changed from the Nifty 50 to the Nifty 100 ESG Index.

SBI Magnum Multicap Fund: The fund was previously able to invest 70-100% of its assets in companies across different market capitalization with the balance (if any) in debt. It had also previously set rigid limits for large-cap (50-90%), mid cap and small cap (10-40%) allocations. The equity range has now been relaxed to 65-100% and the sub-limits have been removed.

SBI Magnum Midcap Fund: This fund could previously invest 65-100% of its assets in midcaps. It could place 0-35% of its assets in small caps, 0-30% in debt and 0-20% in large caps. This has now been simplified. The fund can invest 65-100% in midcaps, defined as companies ranging from the 101st to the 250th largest company by market capitalization. It can invest the balance 0-35% in other companies (smaller or larger) or in debt. The fund’s benchmark has been changed from Nifty Midsmallcap 400 to Nifty Free Float Midcap 150.

SBI Magnum Multiplier Fund (now SBI Magnum Large and Midcap Fund): The fund could earlier invest 70-100% of its corpus in equities and 0-30% in debt. It must now invest 35-65% in the stocks of large caps and mid caps respectively. Large caps are the top 100 companies by market capitalization and midcaps are comprised of companies from the 101st rank to the 250th rank by market cap. It can invest 0-30% in other companies, other than the ones above or in debt. The fund’s benchmark has been changed from S&P BSE 200 to S&P BSE Large Mid Cap.

SBI Emerging Businesses Fund (now SBI Focused Equity Fund): The fund was earlier able to invest 90-100% of its assets in equities and 0-10% in money market instruments. It can now invest 65-100% of its assets in equities and 0-35% in debt/money market instruments. However, it can hold no more than 30 stocks.

The fund has already brought its holding below this threshold with 28 stocks.

SBI Small and Mid Cap Fund (now SBI Smallcap Fund): This fund was previously allowed to invest 90-100% of its assets in equities and 0-10% in debt. Within the equity portion, the sub-limits for small-caps were 50-70%, mid-caps were 30-40% and large caps were 0-20%. Large caps were previously defined as the top 100 companies, midcaps as the 101st to the 400th and small caps as those smaller than the top 400 by market cap.

The fund will now have to invest 65-100% of its assets in the stocks of small-cap companies. These have been defined as companies smaller than the top 250 by market cap. The rest can be invested in other types of companies (mid or large) or debt.

Sector/Thematic Funds

SBI Contra Fund: This fund was earlier required to invest 90-100% of its assets in equities. It must now invest 65-100% of its corpus in equities that satisfy the fund’s theme (contra or out-of-favour stocks). The remaining 0-35% can be in other stocks or debt. The benchmark index for this fund has also been changed from S&P BSE 100 to S&P BSE 500.

SBI Magnum Global Fund: The fund could previously invest 80-100% of its assets in equity and 0-20% in debt. Now it must invest 0-80% of its assets in the stocks of Multinational Companies. It can invest the rest in other types of companies or debt. The benchmark has been changed from S&P BSE Midsmall Cap Index to the Nifty MNC Index.

SBI FMCG Fund (now SBI Consumption Opportunities Fund): This fund was earlier required to invest 90-100% of its assets in equities. It must now invest 80-100% of its corpus in equities that satisfy the fund’s theme (consumption stocks). 0-20% can be in other stocks or debt. The fund’s benchmark has also changed from the S&P BSE FMCG Index to the Nifty India Consumption Index.

SBI IT Fund (now SBI Technology Opportunities Fund): This fund was earlier required to invest 90-100% of its assets in equities. It must now invest 80-100% of its corpus in equities that satisfy the fund’s theme (technology stocks). A 0-20% can be in other stocks or debt. The fund’s benchmark has also changed from the S&P BSE IT Index to the S&P BSE Teck.

SBI Pharma Fund (now SBI Healthcare Opportunities Fund): This fund was earlier required to invest 90-100% of its assets in equities. It must now invest 80-100% of its corpus in equities that satisfy the fund’s theme (healthcare stocks). A 0-20% can be in other stocks or debt.

SBI Magnum COMMA Fund: This fund was earlier required to invest 65-100% of its assets in equities. It must now invest 80-100% of its corpus in equities that satisfy the fund’s theme (healthcare stocks). 0-20% can be in other stocks or debt.

SBI Infrastructure Fund: This fund was earlier required to invest 65-100% of its assets in equities. It must now invest 80-100% of its corpus in equities that satisfy the fund’s theme (infrastructure stocks). 0-20% can be in other stocks or debt.

SBI PSU Fund: This fund was earlier required to invest 65-100% of its assets in equities. It must now invest 80-100% of its corpus in equities that satisfy the fund’s theme (public sector stocks). 0-20% can be in other stocks or debt.